Strategic Structured Settlements

Settlements, Many civil cases, particularly accident and personal injury lawsuits, never make it to trial because the parties reach a settlement agreement earlier in the litigation process.

Parties may tailor annuities to cover a plaintiff's specific needs and all sorts of future demands or contingencies.

Certain parts of a settlement, whether a lump sum payment or a structured settlement, can be taxed, including punitive damages, some attorney's fees, purely emotional damages not stemming from physical injury, and more.  A plaintiff may fear that, no matter how the settlement protects against negative economic conditions such as inflation or recession, unknown changes in the economy could make the annuity payments too small. In the past, some insurance companies were reluctant to disclose how much they would have to pay to buy an annuity covering the amount of the settlement. A structured settlement frequently costs insurance companies less than it would to make a lump-sum settlement. Without this information, the plaintiff's attorney was not be able to make a complete assessment of the benefits and drawbacks of a settlement offer. Today, however, most states, such as New York and Florida, have some form of a disclosure law known as a "Structured Settlement Protection Act" (SSPA). These laws require insurers to be upfront about their costs.